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Friday, April 16, 2010

Guam Governor Lobbied for Broadband Stimulus Monies to Grant Winner - Brother's Employer



StimulatingBroadband.com 04/16/2010 San Francisco – Governor Felix P. Camacho (R-GU), the incumbent governor of the U.S. territory of Guam, lobbied the U.S. Commerce Department for federal broadband stimulus monies for a Philippine owned firm which both won $8 million in funds, and employs the Governor's brother.

IT&E CEO Jose Ricardo P.R. "Ricky" Delgado (l); Guam Governor
Felix P. Camacho; and Ricardo C. Delgado, Chairman Pacific Telecom, Inc.
/ Citadel Holdings at a June 2009 trade event in Manila.  Photo: Rhoy Cobilla
On April 1, Assistant Secretary of Commerce Lawrence E. Strickling announced the award of $8.039 million in a broadband infrastructure grant to the integrated services telecom carrier called Island Telecommunications and Engineering (IT&E). 


Governor Camacho sent a letter 5 days earlier to Mr. Strickling strongly recommending funding of the firm's stimulus efforts. Mr. Carlos Camacho, brother of the Governor, serves as Public Relations and Special Projects Manager at IT&E.

Delgado vs Disney
IT&E is a foreign owned corporation, controlled by Citadel Holdings, headquartered in the booming Makati central business district of of Manila, Republic of the Philippines. Citadel is the privately held conglomerate of the Delgado family, concentrated in aviation services, logistics and telecom. IT&E additionally has a 25% equity stake from Japan’s Sumitomo Corp., the electronic and industrial corporation.

Earlier this week, GTA Teleguam, the privatized former state quasi public authority which had been the monopoly provider for the U.S. territory, issued a press statement which became widely covered in the general business and telecom sector media. GTA described the award as an unnecessary and federally financed overbuild of its modern broadband network. GTA Teleguam is owned by Shamrock Capital Advisors, the Burbank, CA private equity firm launched by the late Roy E. Disney.

Letter Authentic, Manager Camacho Interviewed
StimulatingBroadband.com obtained a copy of Governor Camacho’s letter to Mr. Strickling yesterday from a confidential source. Ms. Charlene Calip, the Governor’s spokesperson, confirmed to us that Governor Camacho did issue the letter in late March to Mr. Strickling, just prior to the Round 1 award announcement. Ms. Calip provided a copy of the same letter to us, for confirmation of its authenticity.

Larry Strickling serves as the Administrator of the National Telecommunications and Information Administration (NTIA). NTIA, part of the Commerce Department, is charged by Congress with the management of $4.7 of the total $7.2 billion broadband stimulus program within the $787 billion Recovery Act. Prior to our receipt of the Camacho letter to Strickling from the confidential source, we had found no previous public posting of the letter, nor any report of its existence.

In the fourth quarter of 2009, we had attempted to secure a copy of Governor Camacho’s letter of recommendation to NTIA submitted in October relative to Guam's input on any Round 1 applications to NTIA which proposed projects on the island. Given our efforts of last year, StimulatingBroadband.com has assembled the largest collection of such documents available outside the NTIA itself. Ms. Calip this evening was kind enough to forward a copy of that letter, dated October 14, 2010 and sent to Mr. Ian Martinez, the outreach director at NTIA.

In a telephone interview of last evening, Mr. Carlos Camacho stated that his position with IT&E is that of Public Relations and Special Projects Manager. A previous call to the firm's human resources office confirmed with that Mr. Camacho is an employee of the carrier.

No Gubernatorial Recusal
Thursday afternoon, Guam time, we asked spokesperson Calip if, prior to issuing his March 25th letter touting his brother's employer, did the Governor consider recusing himself from the action, given the appearance of conflict of interest.

Ms. Calip responded “I couldn’t say if he took the opportunity to recuse himself or not, I will need to check on that, and to get back.” She continued by saying, “what I can say is that the offer was extended to all applicants, and IT&E was the only applicant to take up on the offer.”


Our brief reading of the public ethics statutes of Guam, together with the guidelines published by the territory's Office of Public Accountability lead us to believe that any effort of a public official to use the powers of office to benefit the interests of a family member are clearly prohibited. The Office is the official anti-corruption agency of Guam established in response to historically endemic levels of public corrupt practices. As of this posting, our inquiries to the agency have gone unanswered.

Governor’s Recommendation Points to U.S. Military Buildup
In his 1 page letter dated March 25 addressed to Strickling, Governor Camacho opens by saying “The Government of Guam is facing drastic infrastructure challenges as our community prepares for the military buildup planned for our island.” He is referring to the highly controversial effort of the U.S. defense establishment to proceed with the relocation of some 8,000 U.S. Marines from bases in Okinawa, Japan to new and upgraded military facilities on Guam.

Oddly however, the Governor's lengthy submittal to the U.S. government of February 16, commenting for Guam on the Draft Environmental Impact Statement / Overseas Environmental Impact Statement for the proposed rebasing makes no mention of any telecom / broadband infrastructure insufficiencies. The Governor's letter of March 25 appears to be heavy on points aligned with the interests of IT&E, yet not aligned with the federal filing of 5 weeks earlier.

No Transparency at NTIA
Equally difficult to fathom is the influence, if any, of the Governor's lobbying on the Round 1 award to IT&E, given the lack of transparent processes at NTIA, conducted in contravention of President Obama's open government directives.

The March 25 letter may have been issued in support of IT&E's Round 2 application in the far greater requested amount of $89.687 million, as the specifics of the projects being recommended are not identified. To date, the NTIA still considers all state and territorial letters of recommendation to be non-public, a situation which allows jurisdictions like Guam, Minnesota, North Dakota, Puerto Rico and a handful of others to treat government-to-government communications about federal tax dollars as private missives.

Only with the current dust-up in the media between GTA and IT&E, and the concurrent leaks and disclosures from public employees are we getting a possible picture of the patterns of influence in Guam. We are not able to see into the decision making process in Washington however.

It appears that NTIA's public disclosure of ex parte meetings about the broadband stimulus program continues to lag months behind. The agency also continues to withhold all application scoring records of reviewers, and metrics about broadband unserved / underserved areas as presented by both applicants and the incumbent providers disputing applicant statements. The relative weight assigned these and other factors in the discretionary judgments of the Administrator become especially open to speculation in the absence of open data sources.

Taken together, the lack of a transparent process at the federal level drives a growing lack of public confidence in a program that should be a model for government action. Rare glimpses behind the veil of secrecy that briefly reveal potential untoward influence, like that of Governor Camacho, on add to such diminished confidence given the paucity of information.

Our Take: More Questions Than Answers
Earlier this week GTA, correctly in the view of most of us that have looked at the existing infrastructure in perhaps the most wired small island in the world, raised fundamental questions about how the federal broadband stimulus program is being managed. Are we indeed spending tens of millions - or hundreds of millions - of public dollars to wastefully overbuild existing high capacity network facilities? That is a critically important question.

The actions of The Honorable Felix P. Camacho tell us however that an even more basic question of governmental accountability and transparency needs be addressed in Washington, and fast. StimulatingBroadband.com
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